Ziopharm in Partner Talks for Experimental Cancer Drug

Ziopharm Oncology Inc., a developer of experimental cancer drugs, is in talks with potential partners to market its lead compound, palifosfamide, Chief Executive Officer Jonathan Lewis said.

“All options are on the table,” Lewis said today in an interview in New York. “There are discussions going on right now as regards potential partnering.”

Ziopharm is in late-stage trials of the medicine for soft-tissue sarcoma, a cancer of the muscle, fat and other body tissues. The New York-based company said today it will report results from the study in the last week of March, driving shares to the biggest increase in three years.

Ziopharm likely will collaborate with a large, global company, collecting a royalty on the medicine’s sales if it’s approved, Lewis said. He didn’t name potential partners.

About 11,280 people in the U.S. were diagnosed with soft tissue sarcomas last year, and 3,900 were expected to die from the disease, according to the National Cancer Institute. Palifosfamide is being tested as an initial treatment for metastatic soft-tissue sarcoma, a form of the disease that has spread to other areas of the body.

The need for new medicines to treat metastatic soft-tissue sarcoma is high, as a patient’s chances for survival decline drastically once the cancer has spread, Lewis said. London-based GlaxoSmithKline Plc’s Votrient won approval in April for use in patients with soft-tissue sarcomas who have already had chemotherapy.

Shares Surge

Ziopharm rose 18 percent to $4.69 at the close in New York, the biggest single-day increase since October 2009. The shares have fallen 11 percent in the past 12 months.

“It’s a surprisingly strong reaction,” Jason Butler, an analyst with JMP Securities in New York, said of the stock’s movement in a telephone interview today. He recommends buying Ziopharm shares. Investors had previously worried that the study results might be delayed, he said.

Ziopharm initially had planned to report results from the trial in the fourth quarter of last year and said in November the data would be later than that. Today, the drug developer reported that it had reached a point in the clinical trial where enough data had been gathered for analysis.

“Several things here are pointing in the right direction,” Lewis said. “But it’s blinded, so we just don’t know.”

A partnership may happen before the data are presented, or more logically after they are known, Lewis said.

The trial’s results will have a large impact on the company’s stock, Butler said.

“If it fails, there’s pretty substantial downside,” he said. “This is binary biotech 101.”

Butler estimates the drug could draw $250 million in peak revenue in the U.S. by 2020, if approved.